Lac-Mégantic: The buck stops at Parliament Hill—study

OTTAWA—A study released today by the Canadian Centre for Policy Alternatives (CCPA) points the finger at corporate negligence and regulatory failure as root causes of the Lac-Mégantic disaster.

According to the study, by CCPA Executive Director Bruce Campbell, the evidence to date suggests a flawed regulatory system and cost-cutting corporate behavior that jeopardized public safety and the environment, with the chain of responsibility extending to the highest levels of corporate management and government policy-making.

“Barring new evidence, it seems Montreal, Maine and Atlantic, an admittedly poor performer compared to other companies, simply took advantage of the freedom granted by the regulatory system,” says Campbell.

The last five years have seen a wild-west boom in the transportation of oil by rail. Close to 275,000 barrels of crude oil per day are now shipped by rail in Canada—up from almost none five years ago. And yet, Transport Canada’s Dangerous Goods division budget has remained extremely small—$13 million to cover all modes of transportation.

“It has only 35 inspectors, the equivalent of just one inspector for every 4,000 tank carloads of crude oil transported in 2013. In 2009, when the oil-by-rail boom started, there was one inspector for every 14 tank carloads,” Campbell says.

The study also finds that, despite the dramatic rise in oil shipments, the government cut the rail safety division’s budget by 19% from 2010 to 2014.

The study points to several other flaws in the regulatory system, including:

The Transport Minister granted Montreal, Maine and Atlantic an exemption from the required two-person crews, one of only two exemptions granted for a freight railway—despite objections from the union representing workers and a troubling safety record—possibly due in part to pressure to adopt the lower US standard, which permits one-person crews.

Amendments to the Railway Safety Act more than a decade ago surrendered authority to companies to develop their own safety management systems—making their own judgments about the balance between cost considerations and the risks to public safety. Referred to as co-regulation between government and industry, this is in effect, self-regulation.

In the months leading up to the accident, industry lobbyists repeatedly advocated against new safety regulations for the transportation of dangerous goods.

“Lac-Mégantic has heightened public awareness of the dangers of huge shipments of crude oil passing through their communities—whether by pipeline or rail,” says Campbell. “The proliferation of oil-linked rail accidents will keep the focus on the need for major regulatory improvement.”

“It is important to keep the spotlight on the flawed self-regulation approach that lies at the heart of the regulatory failure responsible for Lac-Mégantic. The government needs to take back authority ceded to corporations,” Campbell concludes.